Reply #32: The central notion of progressivity is that the more money

[AP]

you have, you have a decreasing marginal value of an additional dollar. Another way to put it is that you have an exponentially increasing tolerance for spending your money. If it's easy for you to make an addtional 10 cents (when you make 15,000 bucks a week), you'r not going to waste your time haggling over a few pennies more for this or that item.

When electricity is charged at a flat rate, and that rate is expected to pay for infrastructure and all those things which used to be funded out of the public purse, you are switching from a system in which people who benefitted the most were asked to fund the society that made them wealthy by paying taxes at a rate which burdened them exactly the same -- considering marginal valuations of additional dollars as wealth increases -- as poor people.

You're switching to a system of funding public infrastructure which is totally income insensitive. Consume more, pay more, yes. However, two things to consider here. First, with monopoly utilities, much of consumption is income insensitive. If you're poor, there you still need some water and electricity and gas just to live. Second, you can't just compare consumption rates of rich people and poor people without taking account the STAGGERING differences in wealth. Yes, a guy with a mansion may consume ten, twenty, fifty times more electricity than a middle class guy in the suburbs. However, is he only ten, twenty or 50 times wealthier? Even people in the suburbs are going into credit card debt, and may start having negative equity, and might actually be losing wealthy year on year. The guy in the mansion consuming, and paying twenty times more electricity may be 1000 times wealthier, or 1000000 times wealthier.

If utility infrastrutcture were funded out of progressively collected income and wealth taxes, the millionaire consuming 50 times more electricty might actually have to bear a burden for paying for that insfrastructure which matches the benefits he's deriving from an infrastructure which creates a marketplace which gives him so much wealth.

That's why Bush wants to pay for utility upgrades with increased rates, and not out of progressively collected income taxes. He knows that the super rich will get the free ride if the rates go up. He knows that they'll be asked to pay their fair share if progressive taxation funds infrastructure.